Solid results for Sanofi, not inclined to raise Genzyme bid

Sanofi-Aventis has posted a solid set of figures for the third quarter this morning and raised its full-year earnings forecast despite the introduction of generic Lovenox in the USA.

The French drugmaker's 'business' net income, ie adjusted earnings excluding items, actually fell 2.2% to 2.47 billion euros, while sales were down 1.7% to 7.82 billion euros. Pharmaceuticals declined 3.5% to 6.60 billion euros reflecting the entry of competition to the antithrombotic Lovenox (enoxaparin) in the USA, which saw sales fall 26.1% to 589 million euros.

The figures were also hurt by the workdown of generics inventory in the USA for colorectal cancer drug Eloxatin (oxaliplatin) which sank 43.5 % to 120 million euros. Sanofi is also suffering generic competition in Europe to the bloodthinner Plavix (clopidogrel), partnered with Bristol-Myers Squibb, which brought in 505 million euros to Sanofi’s coffers, down 30.4%. The cancer drug Taxotere (docetaxel) slipped 4.9% to 537 million euros.

On the bright side, the Paris-headquartered firm's diabetes division contributed 1.10 billion euros (+6.7%), and Lantus (insulin glargine) made up 900 million euros of that, also a rise of 6.7%. The new anti-arrhythmic Multaq (dronedarone) brought in 46 million euros, up 223.1% and Sanofi said the US launch of Jevtana (cabazitaxel) for prostate cancer has exceeded the group’s expectations, with sales of 41 million in less than three months.

Regarding its older products, the antihypertensive Avapro/Avalide/Karvea (irbesartan) also partnered with B-MS, inched up 0.3% to 527 million euros, thanks to strong growth in the emerging markets. The sleep drug Ambien (zolpidem) brought in 218 million euros (-9.4%), while sales of the antihistamine Allegra (fexofenadine) were down 23.4% to 136 million euros.

Sales at Sanofi’s vaccines division were up 8.9% to 1.23 billion euros, the consumer healthcare business brought in 576 million euros (+45.8%) and generics revenues climbed 18.9% to 390 million euros.

Chief executive Chris Viehbacher, noting that the results were "enhanced by favourable currency tailwind", said that "tight cost control and good performance of growth platforms" have allowed the group to slightly raise its guidance for 2010 to earnings per share growth of 0%-2%, compared with an earlier forecast of a decline of up to 4%.

No upping of Genzyme bid

On a conference call, he also spoke about Sanofi's hostile $18.50 billion (or %0.69 per share) bid for Genzyme Corp. The latter made the case for a $0.89 offer last week but Mr Viehbacher is not biting.

He said that "while it is encouraging to see the company is making progress on some fronts, as expected," Sanofi believes "Genzyme's financial targets ignore the realities of the market and the company's current situation". Mr Viehbacher described Genzyme's forecasts as "rosy", adding that "the bottom line is, we didn't hear anything of substance that would cause us to change our $69 per share offer".

Sanofi, he concluded, will stay "patient and disciplined" and it still hopes to be able to discuss the deal with Genzyme's board.